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Below is today’s media coverage outlining in more detail the Opposition’s arguments for having a judicial inquiry into the slush fund affair. Attached is the text of the press conference held last Friday by Shadow Attorney Brandis on the legal issues.

If elected the Opposition is now committed to conducting such an inquiry. That could change and, provided it did not hold up reforms to the regulatory arrangements, a more logical course would be to follow the suggestion by Peter Reith and have a broad ranging inquiry. Shadow Minister Abetz conceded such a possibility (see article below from today’s Age) and this appears to have been supported by former Labor Treasurer of NSW (and unionist), Michael Costa, who is the author of a booklet criticising the “old” (pre 1996) regulatory system.

One other thought. Some commentators on the poll on the reactions to last week appear to be brushing aside the number showing how many would consider changing their vote. But is 56% a small number?

Des Moore

Judicial inquiry needed into slush fund affair

Julie Bishop AFR 03 Dec 2012

Julia Gillard
Julia Gillard Photo: Andrew Meares

The Australian Workers’ Union fraud took place between 1992 and 1996. Hundreds of thousands of dollars went missing and to date no one has been charged.

Many of the missing pieces rest within the knowledge of Prime Minister Julia Gillard and her former partner Bruce Wilson, neither of whom have given testimony to police about their respective roles.

It all began with Gillard’s legal advice on the incorporation of an association in the name of the AWU.

It was a sham from the outset.

According to Gillard, Ralph Blewitt, who lived in Western Australia, was to be the responsible officer for an entity located in WA with Western Australian members, set up under Western Australian laws and registered by the Western Australian Commissioner for Corporate Affairs.

Why wouldn’t a solicitor in the Western Australian office of Slater and Gordon, familiar with the relevant local laws do the work? After all, that is why national law firms have offices in other states.

Had the Perth office taken such instructions they may have asked awkward questions, like whether Wilson or Blewitt were authorised to set up an entity using the name of the AWU. We now know that neither was authorised.

Instead, Gillard, a partner of the firm in Melbourne, did all the work alone and in secret. She sought no advice from experts in the firm and did not use the firm’s precedents for drafting the relevant rules.

No one else within the firm appears to have any idea what she was up to at the time. Neither, as it turns out, did the firm’s major client, the AWU, for Gillard did not open a file on the firm’s record-keeping system. This is a critical point.

Given that the whole point of opening a file is to guard against conflicts of interest, it is simply inconceivable that Gillard overlooked this basic duty to her partners.

Secondly, it was incumbent on her to ensure her partner, Bruce Wilson, and her friend, Ralph Blewitt, had the authority of the AWU to set up a separate legal entity in its name.

She cannot claim that as they were union officials she was entitled to assume they had the authority. They did not.

Had she opened a file, a routine conflict check would have prevented her from proceeding further.

Gillard completed the application with the name of the association “Australian Workers Union Workplace Reform Association”. Its purpose was stated to be “Development of changes to work to achieve safe workplaces”.

Yet Gillard described it as a “slush fund” in her exit interview, “into which the leadership team puts its money so they can finance their next election campaign”.

She said that her “thinking” was that it was “better to have an incorporated association, a legal entity, into which people could participate as members, that was the holder of the account.”

Her advice offended against section 8 of the WA Associations Incorporation Act 1987, which provides that an association cannot have a name “likely to mislead” as to the object or purpose of the association – it was a slush fund for elections, not about safe workplaces.

The name was also “identical with or likely to be confused with” the name of another entity, in this case the AWU.

There were only two members of the association, Wilson and Blewitt, and not the requisite “more than five members”.

Not surprisingly, the Commissioner of Corporate Affairs questioned the application.

Gillard wrote to the commissioner “arguing for its incorporation”.

On whose behalf did she claim to be acting – Wilson and/or Blewitt as officers of the AWU?

Using the authority of her standing as a partner in a law firm, Gillard was able to convince the commissioner that the association had the authority of the AWU, that it was for the purpose of workplace safety, and that it had more than five members.

It is an offence under section 43 of the act to knowingly make false and misleading statements.

Once the association was registered, it is alleged that Wilson fraudulently obtained hundreds of thousands of dollars from building companies, who believed they were dealing with the AWU, for workplace safety and training purposes.

The fraudulent activities continued  with various twists and turns but the existence of this slush fund was not detected until 1996.

The federal opposition contends that in relation to the setting up of the incorporation, Wilson, Blewitt and Gillard have a case to answer under Section 43 of the act.

Section 170 of the Criminal Code is also relevant, which provides that “any person who being required . . . to give information . . . knowingly gives information . . . that is false in a material particular is guilty of a crime . . . ”

Section 409 of the Criminal Code sets out the elements of the criminal act of fraud.

“Where’s the smoking gun?” was a familiar refrain in the years before an incriminating transcript came to light during the Watergate investigations that led to President Richard Nixon’s resignation. In the case of the AWU fraud, the ground is already littered with spent cartridges.

Given that the Prime Minister refuses to answer to the Parliament, the only way to get to the bottom of this matter is for there to be a judicial inquiry.

In 1996 there was a formal request by former AWU official and current Fair Work Australia commissioner Ian Cambridge for a royal commission into this fraud.

Former WA AWU official Tim Daley has also requested a formal investigation and has been joined in recent days by former NSW Labor treasurer Michael Costa.

This will be the only way that light can be shed on a dark chapter in the history of the AWU.

Julie Bishop is the Deputy Leader of the opposition.

The Australian Financial Review

Bishop ups ante on slush fund scandal

AFR 03 Dec 2012, James Massola and Joanna Mather

Prime Minister Julia Gillard’s legal advice on the incorporation of an Australian Workers’ Union “slush fund” was a “sham from the outset”, Opposition Deputy Leader Julie Bishop alleges, with the work done “alone and in secret”.

Writing in Monday’s The Australian Financial Review, Ms Bishop accuses Ms Gillard of avoiding using the Perth office of her then firm because the local office “may have asked awkward questions”.

And Ms Bishop has vowed the Coalition will not rest in its push for a judicial inquiry, asserting that Ms Gillard’s advice had offended sections eight and 43 of Western Australia’s Associations Incorporation Act 1987 and that Ms Gillard may have committed offences under sections 170 and 409 of the criminal code.

“Given that the Prime Minister refuses to answer to the Parliament, the only way to get to the bottom of this matter is for there to be a judicial inquiry,” Ms Bishop writes.

Ms Gillard drew a clear distinction between her government and the opposition on Sunday, attempting to move debate on from the AWU affair as she set out her plans to tackle rising power prices and improve health and education.

The Prime Minister predicted the Coalition would continue to pursue the slush fund scandal because the opposition lacked a positive policy agenda and said voters were fed up with hearing about “sleaze and smear”.

Federal Parliament’s final week was dominated by the AWU affair, with the opposition arguing Ms Gillard had broken the law by providing false information in a letter she wrote to the West Australian Corporate Affairs Commission in 1992 about the incorporation of the Australian Workers’ Union Workplace Reform Association.

Ms Gillard provided advice to a former boyfriend, Bruce Wilson, in 1992 on setting up the association, which she subsequently described as a union slush fund.

She has repeatedly denied any wrongdoing and challenged the Coalition to provide any evidence of wrongdoing, calling on Opposition Leader Tony Abbott to “put up or shut up” over the affair on the final day of Parliament last Thursday.

She seized on Mr Abbott’s promise to hold a judicial inquiry into the AWU affair if he was elected prime minister, arguing it would be a turn-off for voters.

“Mr Abbott is now going to ask the Australian people in 2013 to vote for him on the basis that the centre of his prime ministership would be continuing this personal campaign of sleaze and smear,’’ she told Channel Ten on Sunday.

“He is going to go to the next election in 2013 with no real plan for jobs, nothing on health, nothing on education, nothing on power prices, nothing on national security, and the list goes on. The driving purpose of his prime ministership would be to continue a fight against me, rather than a fight for the Australian people.”

Mr Abbott argued on Sunday that there had been “gravely unethical conduct” by the Prime Minister in the AWU affair but declined to repeat the suggestion from his legal affairs spokesman, George Brandis, that there was a “criminal” living in the Lodge. He said Ms Gillard had “obviously” misled the WA Corporate Affairs Commission.

“I think that was an interjection across the chamber, George made a very considered speech in the Senate and then he gave a very full press conference on Friday when he set out in great detail exactly what offences may have been committed arising out of the AWU slush fund scandal,’’ Mr Abbott said. “The point I make . . . is that plainly there has been gravely unethical conduct from the Prime Minister and possibly unlawful conduct.”

Mr Abbott said he was focused on developing positive plans for Australia’s future, highlighting the release of a book of his speeches last week.

The Australian Financial Review

Costa calls on PM to assist police in any AWU probe

Sid Maher, The Australian, December 03, 2012

Prime Minister Julia Gillard in Canberra yesterday as she continues to deny wrongdoing in the AWU affair. Picture: Ray Strange Source: The Australian

FORMER NSW Labor treasurer and one-time union leader Michael Costa has called on Julia Gillard to co-operate with any police inquiry into the AWU "slush fund" affair as the Prime Minister prepared to face more questions over her actions as a lawyer in the 1990s.

Ms Gillard said yesterday she was prepared for continued opposition attacks, but repeated her vehement denials of wrongdoing and said Australians were sick of "negative personality based politics" from Tony Abbott.

The Opposition Leader yesterday continued his attack, telling the Ten Network's Bolt Report she had engaged in "gravely unethical" and "possibly unlawful" conduct. "The point I make is that the Prime Minister obviously misled the Western Australian Corporate Affairs Commission and the next point I make is that it is unlawful to do that," he said.

The row followed the release of a transcript of a 1995 meeting between Ms Gillard and her former partners at Slater & Gordon in which she agreed she had argued for the incorporation of the AWU Workplace Reform Association with the Western Australian Corporate Affairs Commission after its application for incorporation had initially been rejected on the grounds it was a union.

Ms Gillard admits that as a partner at Slater & Gordon in 1992 she provided legal advice to help union officials Bruce Wilson, her then boyfriend, and Ralph Blewitt incorporate the AWU Workplace Reform Association. She later described it as a "slush fund" for the re-election of union officials, but says she had no knowledge of the workings of the association, which Mr Wilson and Mr Blewitt used to defraud the union of thousands of dollars.

Mr Costa, who as NSW Labor Council secretary in 1996 opposed a royal commission into the affair, said yesterday the opposition had not made its case against Ms Gillard and that opposition legal affairs spokesman George Brandis had gone "way too far" in alleging laws had been broken. But he now supported an "inquiry into a range of allegations across the union movement" and said it would have been better for Ms Gillard to be "more up front" about the details.

News Limited's Sunday papers published a poll of more than 1000 people last week that showed 31 per cent of voters believed the Prime Minister had lied about the affair, 31 per cent believed she had been economical with the truth and 21 per cent believed she had told the truth. But 56 per cent said the issue would not change their vote at the election, due next year.

Asked about the allegation that she had misled the WA Corporate Affairs Commissioner, and whether it was unusual for the name of the union to be put on such associations, Ms Gillard told Ten's Meet the Press "this is all sleaze and smear from Mr Abbott and his team . . . I did not do anything wrong. The opposition spent the week in overreach and then humiliating backdown. One moment, apparently, I'm guilty of a crime, the next moment it slipped right back to 'conduct unbecoming' . . . The opposition doesn't really have anything to say here of substance."

Former Labor leader Mark Latham defended Ms Gillard and called on her former colleague Nick Styant-Browne to release the full transcript of her 1995 interview to put into context what she told her then partners. He told Sky News's Australian Agenda. there had been no conflict of interest because she did not charge for the work she carried out for Mr Wilson. "It was a small matter that in its day was exceptionally minor and insignificant and to beat it into something that it's not 20 years later I think goes to the heart of one of the sicknesses we have in politics of putting things on the agenda that is of no relevance to the country's future and of no relevance to how we understand Gillard's character," he said.

Call for inquiry into trade unions

The Age, December 3, 2012, Michelle Grattan

FORMER workplace relations minister Peter Reith has called for a Coalition government to set up a broad inquiry into behaviour and governance in the trade union movement and not just into the Australian Workers Union slush fund affair.

He said one issue it should look at was the practice of unions setting up other entities.

''The Electrical Trades Union has 26 corporate entities. Members have no capacity to follow the trail and insist on accountability,'' he said.

On Friday, Opposition Leader Tony Abbott said that in government he would have a judicial inquiry on the AWU affair, in which two union officials, one of them Julia Gillard's then boyfriend, set up an association and stole funds. Mr Reith said it would be preferable to roll this into a wider inquiry.

Shadow workplace affairs minister Eric Abetz said a general inquiry was not on the Coalition's ''to do'' list. But he said issues like money going astray from the Construction, Forestry, Mining and Energy Union's fund to help people with drug and alcohol problems, and the ETU buying a $1.1 million property to lease to one of its officials ''start swinging the pendulum in favour of such an inquiry''.

Mr Reith said the inquiry should also cover the Health Services Union, as well as the issue of the governance used by superannuation funds. ''Appointments to these funds should be based on expertise in business and investing,'' he said.

There were allegations that in some cases the boards of these funds did not devolve decisions to those expert in investment. ''That's a very bad process if it happens,'' he said.

When the Howard government came to power and he was workplace minister, Mr Reith said, the issue of an inquiry on the AWU affair had not been raised, although a leader of the union at the time, Ian Cambridge, wanted a royal commission on the AWU fraud affair.

Mr Abbott on Sunday declined to specifically endorse shadow attorney-general George Brandis' interjection in the Senate last week saying there was ''a criminal in The Lodge''.

''I'll leave the serious lawyers to argue about that,'' Mr Abbott said.

''The point I make is that the Prime Minister obviously misled the West Australian Corporate Affairs Commission, and the next point I make is that it is unlawful to do that,'' he told the Ten Network.

Asked what laws he thought Ms Gillard had broken, Mr Abbott said: ''That's something George Brandis has gone into in great detail.''

Ms Gillard said the opposition would keep carrying on about the AWU matter because it did not have any positive policies.

''Mr Abbott is now going to ask the Australian people in 2013 to vote for him on the basis that the centre of his prime ministership would be continuing this personal campaign of sleaze and smear … The driving purpose of his prime ministership would be to continue a fight against me, rather than a fight for the Australian people.''

A Galaxy poll in News Ltd papers found 31 per cent believed Ms Gillard had lied over the AWU affair, while another 31 per cent thought she was economical with the truth. Only 21 per cent thought she had been open and honest. Despite this, 56 per cent said it would not influence their vote, while 26 per cent said they were less likely to vote Labor.

The poll had the Coalition ahead of Labor 54-46 per cent on a two-party basis.

I'll determine the questions I don't answer
and the manner in which I don't answer them

Cut & Paste, The Australian, December 03, 2012

"JULIA Gillard on the Ten Network's Meet the Press yesterday:

PAUL Bongiorno: Prime Minister, it's a very big allegation for the opposition to make that you misled the WA Corporate Affairs Commissioner. Now, union sources tell me -- union people I've spoken to -- say that it's very unusual for the name of the union to be put on these associations or accounts that are used and, as you've told press conferences, every union does it, but it's unusual to put the union's name in the name of the association, and that's where the misleading comes into it.

Julia Gillard: Paul, this is all sleaze and smear from Mr Abbott and his team, because they haven't got anything positive to say. I did not do anything wrong. The opposition spent the week in overreach and then humiliating backdown. One moment, apparently, I'm guilty of a crime, the next moment it slipped right back down to "conduct unbecoming". What that is telling you is that the opposition doesn't really have anything to say here of substance. It just wants the sleaze and smear to keep going. And, indeed, Liberal strategists have been talking to people in the media saying, "No, we don't have any evidence of any wrongdoing, we just want to keep this going because it fits our political strategy." Well, let's name their political strategy. Their political strategy is one of negativity because they do not have positive plans for the nation's future, and Mr Abbott will never have positive plans for the nation's future.

When socialists are forced to make money. Minutes of Socialist Forum Management Committee Meeting, Wednesday, June 18, 1986:

PRESENT: . . . Julia Gillard . . .

1. Finance. The financial statements for the past three months were tabled. It was noted that new arrangements had been made about photocopying which would considerably reduce the cost. The following fundraising proposals were discussed:

a) Book Fair. It was agreed that Mark and Julia would prepare lists of people likely to donate books . . .

b) Theatre Night. It was agreed that in future a lighter production than "Tracers" was needed for a fundraising night . . .

d) Other Suggestions. It was suggested that the Forum should investigate the possibility of producing Karl Marx ties or stickpins for sale.

Perhaps they'd buy the stickpins?, November 9:

A GROUP of college students chanted "Karl Marx" and "socialism" while celebrating President Obama's electoral victory in front of the White House late Tuesday night, a video shot by Campus Reform reveals.

Socialist making money without stickpins. PM's former lover Bruce Wilson, ABC1's 7.30, November 27:

CARO Meldrum-Hanna: Was $100,000 -- or approximately $100,000 -- used from the slush fund to purchase a property on Kerr Street in Fitzroy?

Bruce Wilson: Yeah, it was, yes.

Meldrum-Hanna: Now, was that illegal?

Wilson: No, not at all.

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